What does the term "liability coverage" refer to in auto insurance?

Liability coverage in auto insurance refers specifically to the protection it provides when an insured individual is held legally responsible for injuries and damages caused to others in an accident. This type of coverage is essential as it helps cover the costs that arise when a driver is at fault for an accident, which may include the medical expenses of other parties, repairs to their vehicles, and other damages they may incur. Understanding liability coverage is crucial for drivers, as it helps ensure that they are financially protected against potential lawsuits and claims that might arise from their actions on the road.

The other options address different aspects of auto insurance but do not accurately define liability coverage. Coverage for damage to your own vehicle pertains to collision or comprehensive coverage, which focuses on protecting the insured's car. Medical expense coverage addresses the costs for medical bills resulting from an accident, specifically for the insured or passengers, rather than liabilities towards others. Lastly, coverage for lost wages due to accidents relates to personal injury protection or income replacement benefits and does not encompass the responsibility for damages inflicted on others.